Connecting Companies to the Future of Energy ConsumptionWed, 02/21/2018 - 15:05
Mexico new energy consumption marketplace is open for business. Market players are facing the complexities of setting up a profitable business model with more numerous and complex variables to take into account. These include little to no track record for energy trading operations in the country and an incipient energy efficiency practice that could make it a difficult market to navigate. “Some companies do not have the resources or manpower to undertake in-depth market analyses, such as analyzing natural gas price trends or electric coverage status, or to put their capital at risk to determine their best power supply option,” says Paul Sánchez, Director General of Brío Suministro. “The appeal of participating in the electricity market as qualified suppliers with a service vocation lies in being adaptable to our clients’ needs.”
Mexico’s energy trading business is only a few years old, which is why, Sánchez says, “when it comes to energy trading, a company’s best asset is its own reputation.” Firstentrant qualified suppliers had to develop a business model absent the Basic Supply Tariff, a government-designed price to signal, with absolute transparency, the real cost of electric generation, distribution and transmission to the rest of the market. Brío Suministro set out to offer its clients an option that gives them stability and control over the cost of their electricity consumption, especially when this expenditure is among the Top 5 for most companies. “CFE does not work under a fixed-price scheme, it uses a formula. Power generation, distribution, transmission and metering costs that impact final consumers are sometimes misrepresented in the calculation of this formula. As you clear all these variables and get to the whole picture, you are in a position to offer a real alternative,” he explains.
An iceberg-like business model was key for Brío Suministro to make its presence known. All its resources and efforts go into the unseen inner workings necessary for the tip to be appealing: its trading systems, market analyses, forecasts and aftersales services, to name a few. Timely availability of information and options, as transpar
ent and user-friendly as possible, are at the core of the company’s strategy to build lasting business relationships. Brío Suministro was born from a strategic association between Grupo GP and Exedra. The former is a construction and property development company that participated in the construction of the BBVA Bancomer Stadium for the Monterrey Rayados football club, and line two of Monterrey’s Metrobús. Exedra is a business development company that started as a consulting firm and now focuses on power generation. “Energy trading is a business of volume with small margins that requires a solid client portfolio, which happens to be Grupo GP’s strength. The newly formed partnership set out to undertake a 250MW combined-cycle plant project and six months in, Brío Suministro was created as this project’s spin-off.
Sánchez’s company wants to showcase its energy efficiency know-how through its integral service in optimized energy consumption. “We look beyond energy efficiency, introducing Industry 4.0 principles involving data mining, IoT and smart production processes to our customers,” he says. Rather than producing commoditized software, Brío Suministro designed from scratch the architecture of its communication system, where a third party connects all its databases and its clients’ consumption data, added to internal analyses, forecasts and market reports, all integrated into a single dashboard available online. “Controllable demand and programmable consumption are the end result we want for our clients.”
Consolidating its brand in the northeastern region of the country and attaining an increased service portfolio by 2021 is the centerpiece of Brío Suministro’s 2019- 2024 business plan. “While Mexico’s electricity market is often seen through the lens of a first-mover advantage, the energy supply business, more than trading electrons, is a financial business,” Sánchez says. Dealing with a financial business without keeping potential risks in mind can lead to bankruptcy. “Brío Suministro has no interest in turning to speculative approaches or financial bubbles,” he says. Closing industrial clients and targeting overlooked segments, such as retail chains, shopping malls and restaurant chains, is how it intends to grow its client portfolio by 20 to 30 percent before the plan's end.